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Summary: Requirements for financial institutions that may sell non-performing credit card, cash card and consumer credit loans as well as secured loans not sufficiently repaid after the disposal of security interests to asset management companies without being restricted by the rules set forth in FSC order Jin-Guan-Yin (4)-Zi-No. 09440010950.
(The FSC order Jin-Guan-Yin (4)-Zi-No. 09740000830 dated April 8, 2008 ceases to apply immediately)
Issued by: Financial Supervisory Commission, Executive Yuan
Date of issue: 2008/08/19
Ref. No.: Jin-Guan-Yin (4)-Zi-No. 09700249710
Subject: Financial institutions shall follow the instructions below in addition to Directions for Sale of Non-performing Loans by Financial Institutions when selling non-performing credit card, cash card and consumer credit loans as well as secured loans not sufficiently repaid after the disposal of security interests to asset management companies.
Explanations:
1. Financial institutions that comply with the following instructions may sell non-performing credit card, cash card and consumer credit loans as well as secured loans not sufficiently repaid after the disposal of security interests to asset management companies without being restricted by the rules set forth in FSC order Jin-Guan-Yin (4)-Zi-No. 09440010950 dated December 19, 2005:
(1) A financial institution may not sell the non-performing loan of a debtor to an asset management company while the debtor is applying for debt negotiation in accordance with Article 151 of Consumer Debt Clearance Act.
(2) The asset managing company that wins the bid for such non-performing loans may not resell the loans to a third party, but should appoint the seller financial institution, or a collection agency designated or agreed by seller financial institution to undertake the collection operation. The appointed collection agency shall undertake to observe the Banking Act and relevant regulations in its collection practice, whereas the seller financial institution should establish internal control and audit systems to effectively oversee and inspect the practice of the collection agency and assume joint responsibility for any improper practice of the collection agency.
(3) Where the winning asset management company bidder violates relevant agreements, the seller financial institution should immediately rescind the agreement with the management company and buy back the non-performing loan, and demand liquidated damages and turn in the name of the asset management company to the Joint Credit Information Center for the reference of other financial institutions.
(4) The financial institution shall include the aforementioned provisions in the agreement signed with the asset management company and have its chief compliance officer verify the related provisions. To protect the interests of consumers, the financial institution shall inform the debtors of the provisions in (2) and (3) above in writing before signing an agreement with the asset management company.
2. For financial institutions that violate the instructions herein, the FSC will mete out punishment pursuant to Banking Act and relevant regulations in view of the situation.
3. The FSC order Jin-Guan-Yin (4)-Zi-No. 09740000830 dated April 8, 2008 ceases to apply immediately.
TO: Bankers Association of the Republic of China (in reply to your letter Shou-Xiao-Zi-No. 1381 dated June 23, 2008).
cc: Central Bank of the ROC, Consumer Protection Commission, Executive Yuan, The National Federation of Credit Cooperatives (please forward this message to member institutions), Joint Credit Information Center, FSC Examination Bureau, FSC Banking Bureau. |